DEPARTMENT OF ENERGY BIOMASS PROGRAM

Advanced Biofuels Cost of Zia Haq

Production
DPA Coordinator
Aviation Biofuels Conference October 12, 2012

1 | Biomass Program eere.energy.gov

Introduction

• Resource assessment – do we
have enough biomass?

• Techno-economic analysis – can

biofuels be produced at
competitive prices?

• Sustainability – What are the

greenhouse gas emissions?

• Integrated biorefineries – what is

being funded at DOE and what
are future plans?

2 | Office of the Biomass Program eere.energy.gov

Techno-Economic Analysis

• Citable source for budget justification

• Setting R&D priorities
• Benchmarking
• Informing multi-sectoral analytical activities
• Track Program R&D progress against goals
• Identify technology process routes and prioritize funding
• Program direction decisions:
• Are we spending our money on the right technology pathways?
• Within a pathway: Are we focusing our funding on the highest
priority activities?

3 | Office of the Biomass Program eere.energy.gov

 Market Driver for Alternative Fuels
– Energy Price Volatility
25.00
$129/bbl, July 2008

Crude oil
• Biomass at $70/bone
Natural gas
Energy Prices ($/million Btu, Nominal $)

20.00 dry metric tonne =

Coal
$3.69/million Btu

15.00
• Corn at $7/bushel =
$14.50/million Btu
10.00

5.00

0.00
1/1/2007
3/1/2007
5/1/2007
7/1/2007
9/1/2007

1/1/2008
3/1/2008
5/1/2008
7/1/2008
9/1/2008

1/1/2009
3/1/2009
5/1/2009
7/1/2009
9/1/2009

1/1/2010
3/1/2010
5/1/2010
7/1/2010
9/1/2010

1/1/2011
3/1/2011
5/1/2011
7/1/2011
9/1/2011

1/1/2012
3/1/2012
5/1/2012
11/1/2007

11/1/2008

11/1/2009

11/1/2010

11/1/2011
• Long term price trends indicate significantly higher value and price volatility for crude oil compared to natural gas or coal

• Military, aviation, marine, long-haul trucking, and long-distance rail have limited alternatives to liquid transportation fuels

Source: Energy Information Administration, Monthly Energy Review, August 2012

4 | Office of the Biomass Program eere.energy.gov
Terminology and Concepts

• Nth plant economics

– Costs represent the case where several biorefineries with this technology have
been built, which assumes lower contingency and other cost escalation factors
– Assumes no risk premiums, no early-stage R&D, or start-up costs

• Pioneer plant
– Costs represent a first-of-a-kind construction, where added cost factors are
included for contingency and risk
– Most closely represented by IBR projects
– Few estimates available in the public domain

• Design Case:
– Detailed, peer reviewed process simulation based on ASPEN or Chemcad
– Establishes cost of production at biorefinery boundary
– Provides estimate of nth plant capital and operating costs
– Based on best available information at date of design case
– Scope: feedstock cost (harvest, collection, storage, grower payment), feedstock
logistics (handling, size reduction, moisture control), conversion cost, profit for
biorefinery
– Excludes: taxes, distribution costs, tax credits or other incentives

5 | Office of the Biomass Program eere.energy.gov

Cost of Production for Hydrocarbon
Biofuels
6

3 Co-product
O&M
Capital
2
$/gal Feedstock

0
Methanol-to-gasoline Pyrolysis Fischer-Tropsch

-1
• Other economically viable technology routes for hydrocarbon biofuels exist, such as conversion of waste and plant oils, and
sugar-to-hydrocarbons
• These costs are projected for the Nth Biorefinery Plant, after operation of initial commercial-scale Pioneer Plants
Sources:
1. Sue Jones et. al., “Production of Gasoline and Diesel from Biomass via Fast Pyrolysis, Hydrotreating and Hydrocracking: A Design Case”, Pacific Northwest National
Laboratory, PNNL-18284, available from http:/www.pnl.govFebruary 2009.
2. Sue Jones et. al., “Techno-Economic Analysis for the Conversion of Lignocellulosic Biomass to Gasoline via the Methanol-to-Gasoline (MTG) Process”, Pacific
Northwest National Laboratory, PNNL-18481, available from http://www.www.pnl.gov, February 2009.
3. Anex, R. A., et. al., “Techno-Economic Comparison of Biomass-to-Transportation Fuels via Pyrolysis, Gasification, and Biochemical Pathways”, Fuel, July 2010.

6 | Office of the Biomass Program eere.energy.gov

 Biofuel Production Costs
Example of renewable fuels via pyrolysis

Renewable gasoline and diesel via pyrolysis

$8.00 $7.68
Modeled minimum conversion cost ($/gal total fuel)

Feedstocks
Feed Drying, Sizing, Fast Pyrolysis
$7.00 $1.33
Upgrading to stable oil
Fuel Finishing
$6.00 $0.54
Balance of Plant

$5.00
$4.55 5%
49% overall cost
$4.00 $0.99 reduction (2012 - 2017)
4%
$4.69
$0.52
34%
$3.00
$2.32

$2.00 $2.01 $0.75

$0.34
4%
$1.00 $0.30 $0.47
$0.29 2% $0.11
$0.82 $0.74 $0.65
0.5
$0.00
2009 2012 Projection Feedstocks Fast Pyrolysis Upgrading to Fuel Finishing Balance of 2017 Projection
State of stable oil Plant
Technology

Pyrolysis costs by unit and projected cost reductions through R&D

7 | Office of the Biomass Program eere.energy.gov

Algae Model Harmonization Initiative

• The Biomass Program uses a baseline algal

production scenario with model-based
quantitative metrics to inform strategic planning

• Preliminary work on resource, techno-economic,

and life cycle assessments integrated with
external stakeholder input during
Harmonization Workshop (Dec, 2011)

• ANL, PNL, NREL joint technical report

“Renewable Diesel from Algal Lipids” (June,
2012), describes the conservative harmonized
pathway

• Renewable diesel from extracted algal lipids

pathway is the Biomass Program’s baseline to
measure progress

• Subsequent workshops will be held to further the

Initiative and consider whole algae processing
and other innovative pathways
8 | Office of the Biomass Program eere.energy.gov
Integrated Baseline Design Configuration

0.05% (OP)

Makeup water Flocculent Makeup solvent Solvent recycle Hydrogen

Offgas

Raw Naphtha
CO2 Open Lipid Phase Solvent oil Upgrading
Settling DAF Centrifuge
Pond Extraction Separation Recovery (hydrotreater)

Diesel
Spent algae
Recycle water + water Biogas
Blowdown for
Anaerobic energy Flue gas from turbine
Recycle nutrients/ water Digestion

Makeup nutrients
Sludge Power

Green = algae cell density

9 | Office of the Biomass Program eere.energy.gov

Integrated Baseline -
Process Performance and Sensitivity
Breakdown of RD Production Costs
• The integrated baseline makes 2%

conservative assumptions on 3% 3% 3% Ponds + inoculum + land

productivity, processing, and co- 1% Liners
Infrastructure
products: 6% Primary settling
• Annual average productivity 13 36%
DAF
8%
grams/m2/day Centrifuge
• 80% processing efficiency 8% Cell disruption
Extraction/separation
• No high-value co-products AD + CHP system
30% Hydrotreating
• The baseline performance is highly
uncertain and small changes in
productivity have big impacts $45

Minimum RD Selling Price, $/gal

$40

• Baseline assumption results: $35

25% lipid
$30
• Unit Scale: 10 MGY renewable diesel 50% lipid
$25
• Minimum Selling Price: ~$20/gallon $20
• Emissions: 67.4 kg cO2e/MMBTU $15
renewable diesel $10
$5

• Innovative work across the value chain is $0

0 10 20 30 40 50
showing promise in reducing costs. Productivity, g/m2/d
Baseline
10 | Office of the Biomass Program eere.energy.gov